Bonus Payment - GST Registration, GST cancellation, GST Return Filing

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Bonus Payment

Applicability 


Bonus is applicable if there are more than 10 employees are working with the aid of power, or Bonus is applicable if there are more than 20 employees are working without the aid of power. 

Note:
Part-time employees can also be considered for calculation of bonus.
 An employee has to have worked for at least 30 days in that company for payment of bonus

Eligibility

Salary more than Rs. 21000/- is not eligible for Bonus.

Calculation of Bonus 


Minimum of 8.33% of the (Basic salary + D.A.)  or a maximum of 20% of the employee’s (Basic salary + D.A.) is payable as bonus in an accounting year. The bonus calculation is Rs. 7,000 or the minimum wages as specified by the government, whichever is higher.

Note:
If Basic+DA is below Rs.7000 then bonus will be calculated on the actual amount
If Basic+DA is above Rs.7000 then the bonus will be calculated on Rs.7000.

Examples of calculation of bonus
If the Basic salary of the employee is Rs 6,500 : Basic Salary*8.33% = Bonus per month
6500*8.33% = 541.45 (6497.4 p.a.)

If the Basic salary of the employee is Rs 16,500 : Basic Salary*8.33% = Bonus per month
7,000*8.33% = 583.10 per month ( 6997.20 p.a.)

If the Basic salary of the employee is higher than Rs 21,000: There is no bonus applicable to employees having a basic salary of more than Rs 21,000.

For Startup: For new startup, the first five accounting years bonus is payable only in respect of the accounting year, in which profits are made. Set on and set off provisions would not apply.

Forfeiture of Bonus

An employee who is dismissed from service on the grounds of fraud, riotous or violent behavior at the premises of the establishment or for the theft, misappropriation or sabotage of any of the property of the establishment as mentioned in the Act. This shall not only disqualify him from receiving the bonus for the accounting year in which he was dismissed but also for the past years which were remained unpaid to him

Time limit for bonus payment

within 8 months from the close of the accounting year.

Annual Return

 Every employer shall, on or before the 1st day of February in each year, upload unified annual return in Form D on the web portal of the Central Government in the Ministry of Labour and Employment.